Pet Care

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Pet Care in Turkey

Nov 2014|Pages: 57

Price: US$2,100

About this Report

EXECUTIVE SUMMARY

Pet care industry continues to record positive growth

During 2013, Turkey’s pet care industry registered healthy value and volume growth due to rising pet ownership, rising urbanisation and a higher number of single-person households, which means that pets are increasingly being kept as companions. In addition, improved economic conditions are leading pet owners to switch from feeding their pets with food scraps to using prepared pet food, while many people are purchasing higher-quality pet food and pet products. There is a major pet humanisation trend underway in Turkey, which goes hand-in-hand with the better treatment of dogs and cats. This also includes spending more on dog and cat food. However, the declines recorded in both bird and fish food continued to have a negative effect on growth in pet care in 2013.

Pet care industry attracts new investment

Aller Petfood, the leading producer of private label pet food, recently acquired Turkish pet food company Petfood Sanayi Tic Ltd Sti in order to serve several countries across the Middle East and North Africa. Istanbul-based wholesale company DBM assumed responsibility for the distribution of Procter & Gamble’s pet food brands Iams and Eukanuba in Turkey as of November 2013. In December 2012, The European Bank for Reconstruction and Development (EBRD) extended €4 million in credit to Tropikal Bahce ve Evcil Hayvan Urunleri AS for research and development activities related to its Goody and Champion pet food brands.

Local pet care companies are expanding

Although multinational companies remained the leading players in premium dog and cat food at the end of the review period, local companies continue to dominate sales of economy and mid-priced dog and cat food. The top four local companies in the pet food industry in 2014 were Tropikal Bahce ve Evcil Hayvan Urunleri AS, Sadanlar Pet Dis Tic Ltd Sti, Cagatay Yem ve Gida San AS and Lider Evcil Hayvan Beslenme Urunleri San ve Tic Ltd Sti, each of which offers their own locally manufactured products as well as some imported products under multinational brands. Tropikal Bahce ve Evcil Hayvan Urunleri AS gained huge traction in the industry in 2012 on the basis of its investment in the manufacture of mid-priced products, while Lider Evcil Hayvan Beslenme Urunleri San ve Tic Ltd Sti improved its performance in economy dog and cat food during 2013.

The most dynamic retail distribution channel for pet care over the review period was internet retailing thanks to increased internet access in Turkey and the rising number of websites in the country which offer pet care products at favourable prices. Internet retailing appeals to pet owners as it offers convenience in terms of delivery as well as access to a very wide range of products. Pet owners can also compare the range and prices of different products and read the comments of other pet owners online. There are pet care specialist websites such as adresemama.com as well as online stores which offer wide ranges of products along with pet food and pet products. These include hepsiburada.com and the internet retailing websites of manufacturers such as temizmama.com. However, the rapid growth being recorded in online sales of pet care is expected to slow down slightly during the forecast period as Turkey’s internet retailers are selling many products at huge discounts, which has led to their profit margins falling far below expectations.

Pet care expected to record positive growth over the forecast period

Over the forecast period, pet care in Turkey is predicted to demonstrate healthy value growth despite the anticipated economic recession in Turkey. Pet care is one of the few consumer goods industries which is likely to be unaffected by the economic recession in Turkey as consumers are still willing to treat their pets with special care. However, value growth in pet care is expected to be driven mainly by growth in demand for economy priced products as the majority of Turkish pet owners are only able to afford economy products and the quality of these products is expected to increase further during the forecast period. Moreover, the falling exchange value of the Turkish lira against the euro is making imported products more expensive and this is expected to increase unit prices further, leading to higher value than volume growth in pet care over the forecast period.